Financial reports issued by the Arts Centre Trust Board which an independent expert believes are "misleading and deceptive" have been referred to the Charities Commission by Save Our Arts Centre Inc.

The Commissioners hearing the application for a resource consent to build a music school at the Arts Centre were told last week that the balance sheets in the Arts Centre annual reports differ materially from the audited financial reports and misstate the level of current assets.

Professor Alan Robb told the commissioners that the claim by the Director, Ken Franklin, that the Arts Centre lacks working capital is not true.

Professor Robb said the figures in the Trust's annual report, which are not audited, fail to follow correct accounting standards and treat investments as a separate balance sheet category. Such a method of disclosure ceased to be acceptable many years ago. They differ from the audited balance sheets which are required to be filed with the Charities Commission.

Professor Robb cited the 2006 report as an example. An apparent working capital deficit of $14,964 was actually a working capital surplus of $4.6 million according to the audited balance sheet.

'I have never seen summary financial statements prepared that are at variance from the audited figures' said Professor Robb. 'The public reports create the impression that the Arts Centre has a long history of working capital shortages. That is not the case. The last year in which there was negative working capital was 1997.'

As I further told the commissioners the Trust's annual reports "materially misstate the level of current assets and give a misleading and deceptive impression of the working capital of the Arts Centre."

Professor Robb's figures have been subsequently peer-reviewed and supported by a second independent expert, at SOAC's request.

SOAC Spokesperson, Dame Ann Hercus said today the Commissioners at the Resource Consent hearing had made it clear to SOAC that the matters raised by Dr Robb were serious but outside their jurisdiction. "SOAC believes the Charities Commission is now the correct entity to turn to for a full investigation. The Charities Commission was set up specifically to ensure openness and transparency in reporting by trusts and incorporated societies. The Arts Centre Trust Board Annual Reports are neither" she said. "Furthermore, Arts Centre Director Ken Franklin's claim that approval of the Music School project is needed to help provide much needed working capital for seismic strengthening in particular is clearly nonsense", she stressed.